Mortgage Demand Rises As Rates Stay Flat

Average mortgage rates were a mixed bag last week, according to the Mortgage Bankers Association’s Weekly Applications Survey. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances dropped slightly, while jumbo loans and 15-year fixed-rate mortgages saw interest rates rise. The average rate for loans backed by the Federal Housing Administration, on the other hand, was unchanged from one week earlier. Joel Kan, an MBA economist, told CNBC rates were up earlier in the week only to fall by Friday. “Treasury yields were relatively flat last week,” Kan said. “While the FOMC minutes showed an increased likelihood of one more rate increase in 2017, nudging rates slightly higher, the week’s gains were offset by a downturn on Friday due to weaker than expected inflation data.” Whatever the case, relatively steady rates led to an increase in both refinance and purchase application demand. In fact, total mortgage demand was up 3.6 percent as hopeful home buyers and homeowners looking to refinance aimed to take advantage of still-low mortgage rates. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications.

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